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Oil is arguably the most important commodity in the world today. Oil and its derivatives make their way into essentially every application of modern life, from transportation and gasoline to plastics.

Because of its vast applications, oil has also become one of the most heavily-traded commodities on the market, offering investors both the necessary levels of volatility and liquidity needed to make a lucrative trade. And thanks to the rapid expansion of the exchange-traded fund industry, investors now have several ways to gain access to the arguably most useful commodity in the world. Below, we outline the three most popular oil ETFs and how they will fit in with your investment objectives.

S&P GSCI Crude Oil Tot Ret Idx ETN (OIL)

Quick Stats (5/18/2015)

Barclays iPath’s (OIL) is one of the most popular options available for investors looking to gain exposure to the lucrative world of crude. Although it’s not the largest futures-based oil ETF available on the market, OIL does offer a healthy trading volume with a three month average volume of 4,677,130. The fund tracks an index that is designed to reflect the returns that are potentially available through an unleveraged investment in the West Texas Intermediate (WTI) crude oil futures contract plus the Treasury Bill rate of interest that could be earned on funds committed to the trading of the underlying contracts. Because of this unique feature, investors might earn a higher return with OIL than comparable products since it collateralizes its investments with T-bills. It is also important to note OIL’s heavy allocation towards long-dated contracts, which may reduce the risk of contango, but also may cause the fund to significantly deviate from spot prices.

OIL is Right for You if: You are an investor seeking to gain exposure to oil futures, but want a methodology that can help avoid the adverse effects of contango.

United States Oil Fund (USO)

Crude Oil Pipeline

Quick Stats (5/18/2015)

The United States Oil Fund (USO) is by far the largest and most popular futures-based oil ETP, offering exposure to the price of light, sweet crude oil futures contracts traded on the New York Mercantile Exchange. Since inception in 2006, USO has accumulated over $3.131 billion in total assets. Besides its sheer size, the fund holds the appeal of being one of the most liquid ETFs available, exchanging hands over 28 million times over the course of three months. Additionally, USO maintains its rank as one of the cheapest oil ETFs available on the market with an expense ratio of just 45 basis points. Despite its mass appeal, USO does have several drawbacks: since the fund invests in front-month contracts, it sometimes exhibits severe contango, making it more appropriate for short-term traders [see also 25 Ways To Invest In Crude Oil].

USO is Right for You if: You are an active trader seeking to either speculate on oil’s movements or quickly execute positions in the commodity.

United States 12 Month Oil (USL)

Quick Stats (5/18/2015)

(USL) is another popular oil ETF, offering exposure to oil prices through futures contracts, but with a slight twist. USL invests in the next twelve months’ contracts, allowing the fund to reflect the average price of a light, sweet crude oil contract over the coming year. Because the fund is diversified across many maturities, USL is less likely to succumb to contango than its competitors. Thanks to the fund’s unique methodology, USL has been gaining popularity among investors. Since its debut in 2007, this ETF has accumulated almost $100 million in total assets and currently maintains a three month average volume of almost 100,000 [see also What Is Brent Oil? The Ultimate Beginner’s Guide].

USL is Right for You if: You are an investor looking to achieve oil exposure, but want to diversify your holdings across futures contracts of different maturities.

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Disclosure: No positions at time of writing.

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